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Workplace Relations Review - Cases and Legislation June 2018

News Alerts

Workplace Relations Review - Cases and Legislation June 2018

Employment Issues, Adverse Action and Unfair Dismissal

Employment Issues

NEWS ALERT: Victoria passes new long service leave legislation

The Victorian Parliament has recently passed the Long Service Leave Act 2018 (Vic) (the new Act) which will repeal the Long Service Leave Act 1992 (Vic). The new Act will come into effect on 1 November 2018 (unless proclaimed earlier by the Victorian Government).

The new Act makes a number of changes to the ways in which employees can accrue and take long service leave. The key changes that employers should be aware of are:

Taking long service leave

  • Employees will be entitled to take long service leave after 7 years of continuous employment with an employer (instead of after 10 years);
  • Employees will be entitled to take single day periods of long service leave (instead of being required to take long service leave in one period);
  • Employers must not refuse an employee’s request to take long service leave unless it is on reasonable business grounds; and
  • Long service leave will continue to be paid based on an employee’s ‘ordinary time rate of pay’ and their ‘normal weekly hours’. However, if either of these are not fixed in an employee’s contract of employment (or in the latter case if their weekly hours have changed in the last two years), then they must be determined as follows:
  • The greater of the employee’s average weekly rate of pay over the last 12 months, 5 years or their entire period of employment; and
  • The greater of the employee’s average number of hours worked over the last 12 months, 5 years or their entire period of employment.

Accruing long service leave

  • The absences that will not break an employee’s “continuous” period of service have been expanded to include:
  • For permanent employees – any periods of paid or unpaid parental leave (no longer limited to twelve months);
  • For casual or seasonal employees – periods of paid or unpaid parental leave that are not longer than 104 weeks;
  • Carer’s leave;
  • Leave taken on account of illness or injury;
  • Any other forms of leave that are provided for under relevant employment agreements;
  • If the employee is re-employed within 12 weeks of their dismissal or resignation (instead of after dismissal only); and
  • Any period of stand-down.
  • The absences that will count towards an employee’s period of continuous employment have been clarified and, in some cases, expanded, to include:
  • All periods of paid leave;
  • If a period of unpaid leave is 52 weeks or less – the whole period;
  • If a period of unpaid leave is more than 52 weeks – the first 52 weeks; and
  • If a period of unpaid leave is more than 52 weeks and it is taken to be a period of employment in accordance with the relevant employment agreement, or by written agreement, or it is taken on account of illness or injury – the whole period.
  • In relation to a transfer of business, new employers must recognise any long service leave entitlements accrued by employees in the previous employment, including when assets (now including both tangible and intangible assets) are transferred to another employer and the employee performs duties in connection with those assets.

Other changes

  • Employers must not refuse a request by an employee (or their representative) to provide long service leave records; and
  • There are now adverse action provisions in the new Act which prohibit an employer from taking adverse action against an employee because that employee is entitled to long service leave or any other entitlement under the Act.
  • The definition of adverse action reflects that which is provided in the Fair Work Act 2009 (Cth) but has been expanded to include action taken against an employee if the employer knowingly or recklessly makes a false representation about the employee’s long service leave entitlements.

In addition to the substantial increase in civil penalties for contraventions of the new Act, officers of offending bodies corporate may also receive criminal records. It is therefore crucial that employers who are affected by these changes take steps to:

  • Review and update their payroll systems to ensure that long service leave entitlements will be correctly calculated and administered to employees; and
  • Review and update all relevant policies and procedures to ensure that they accurately reflect employees’ entitlements to accrue and take long service leave.

Adverse Action and Unfair Dismissal

“FWC finds it is not incumbent upon employers to hear from employees about proposed sanctions in disciplinary matters”

Nyrstar Hobart Pty Ltd v Brain [2018] FWCFB 3346

Executive Summary
The Full Bench of the Fair Work Commission (FWC) has quashed the decision of a single member, in which it was held that an employee’s dismissal was unfair because the employer failed to hear from the employee on the question of sanction before imposing a disciplinary penalty, namely termination of employment.

The employee was employed as a plant operator at the employer’s zinc smelter and production facility in Hobart.

He was dismissed following a serious safety breach where he removed a “person in control tag” and a “live testing statement” from the control panel of a machine whilst the machine was undergoing maintenance. The employee then started the machine, endangering a colleague working on it at the time.

The employee claimed that he was unfairly dismissed and lodged an unfair dismissal application with the FWC.

The matter was heard in the first instance by Deputy President Barclay who found that, whilst there was a valid reason for the dismissal, it was harsh due to the fact that the employer did not provide the employee with an opportunity to respond to the imposition of a sanction, that is, that his employment would be terminated.

The employer appealed this finding to the Full Bench.

The Full Bench reviewed the Deputy President’s decision and found that he had erred in stating that “It was incumbent on the Respondent to hear from the Applicant before imposing sanction.”

This, the Full Bench held, fettered the exercise of the Deputy President’s discretion and created a rule or criteria that did not exist under the Fair Work Act 2009 (Cth) (FW Act) and which the FW Act did not authorise the FWC to make.

The Full Bench noted that in some cases, hearing from an employee as to sanction may be a relevant consideration, but it is not incumbent upon an employer to do so.

The Full Bench quashed the Deputy President’s decision and referred the matter to Commissioner Lee for a rehearing.

What can your business learn from this decision?
Employers are not required under any part of the FW Act to invite responses from an employee about possible disciplinary sanctions.

Whilst employers should always endeavour to engage in a disciplinary process that is procedurally fair, this decision has clarified that failing to invite and employee to give their views on the outcome/sanction is not an automatic failure of an employer afford fairness to an employee.


“Foreperson fails to secure coverage under modern award and held not to be protected from unfair dismissal”

McCullagh v Acciona Infrastructure Australia Pty Ltd [2018] FWC 2997

Executive Summary
A site foreperson was found not to be protected from unfair dismissal under the Fair Work Act 2009 (Cth) (FW Act) on the basis that his earnings were higher than the high-income threshold and his position was not covered by the Building and Construction General On-Site Award 2010 (the Award).

At the time of his dismissal, the employee was engaged in the position of General Foreperson, having recently been promoted from the position of Foreperson.

The employee was dismissed following a failed drug test and lodged an unfair dismissal application with the Fair Work Commission (FWC).

The employer objected to the application on the basis that the FWC did not have jurisdiction to hear the matter because the employee was not protected from unfair dismissal.

Under the FW Act, an employee is protected from unfair dismissal if one or more of the following apply:

  • the employee is covered by a modern award;
  • the employee is covered by an enterprise agreement;
  • the employee’s annual earnings are less than the high-income threshold.

The employer claimed that the employee was not covered by a modern award or enterprise agreement and earned above the high-income threshold of $142,000 per annum. The employee’s salary package was $202,575 per annum plus a fully maintained motor vehicle at the time of his dismissal.

The employee conceded that he earned in excess of the high-income threshold but maintained that his employment was covered by the Award. The employee argued that although he was promoted to General Foreperson prior to his dismissal, that promotion carried no change in duties and the work he actually performed was that of Foreperson.

The employee submitted that Foreperson was a classification under the Award and accordingly, he was protected from unfair dismissal.

The FWC examined the Award and held that the classification of Foreperson in the Award was limited to Forepersons in the metal and engineering industries and not Forepersons in the civil construction industry, in which the employee had been employed.

Further, the FWC found that, had the classification of Foreperson extended to the civil construction industry, it would not have applied to the employee because his duties did not correspond with those described in the relevant Award classification. The FWC also found that the employee was the most senior person in his areas of work and worked essentially unsupervised, as opposed to “under limited supervision” as described in the Award for the Foreperson classification.

Finally, the FWC found that the employee’s area of responsibility, which was worth over $15 million, and his substantial salary were relevant considerations and whilst not determinative, were indicative on the senior role he occupied.

The employer’s jurisdiction objection was upheld and the employee’s application was dismissed.

What can your business learn from this decision?
Modern award coverage is a is an important jurisdictional issue to consider when faced with an unfair dismissal claim from a former employee.

Modern award coverage is not determined just on the nature of the employer’s business or the position title given to the employee, but an overall assessment of the whole circumstances with particular regard to the work actually performed by the employee.

If an employee performs work described by a modern award, they may be covered by that modern award regardless of any above-award salary they are paid. Conversely, if an employee has a similar position title to one that appears in a modern award, that doesn’t automatically mean that the employee is covered by the modern award, especially if the duties the employee performs go well beyond the duties described by that classification.


“FWC confirms approach for calculating personal use of motor vehicle for high income threshold”

Monteiro v Valco Group Australia Pty Ltd T/A Valco Group Australia [2018] FWCFB 3280

Executive Summary
The Full Bench of the Fair Work Commission (FWC) has upheld an appeal finding that the Commissioner at first instance fell into error in determining that a car allowance was earnings for the purposes of calculating whether an employee met the high-income threshold.

The employee was dismissed from his employment in November 2017 and lodged an unfair dismissal application with the FWC. The employer raised a jurisdictional objection to the application on the basis that the employee was not covered by an award or agreement and also earned above the high-income threshold and therefore was not protected from unfair dismissal.

At first instance, the Commissioner determined that the employee’s earnings totalled $151,496, which was above the current high-income threshold of $142,00 and dismissed the employee’s unfair dismissal application.

For the purpose of the high-income threshold, section 332 of the Fair Work Act 2009 (Cth) (FW Act) provides that an employee’s earnings include:

  • the employee's wages;
  • amounts applied or dealt with in any way on the employee's behalf or as the employee directs;
  • the agreed money value of non-monetary benefits; and
  • amounts or benefits prescribed by the Fair Work Regulations 2009 (the Regulations).

An employee’s earnings do not include:

  • payments the amount of which cannot be determined in advance;
  • reimbursements;
  • contributions to a superannuation fund; and
  • amounts prescribed by the Regulations.

First Instance Decision
The Commissioner determined that the employee’s earnings comprised of his salary, payment for private health insurance and a car allowance.

One of the issues to be determined related to the car allowance. The employee argued that the car allowance was a reimbursement and should not be included in the calculation of earnings while the employer argued that it should be included as earnings as it was an additional amount paid to the employee as income.

The Commissioner determined that the employee and the employer entered into an arrangement where the car allowance could be used for anything the employee wished.

The Commissioner found that this arrangement, in addition to the fact that superannuation and taxation were paid on the car allowance, indicated that the car allowance was not a reimbursement. On the basis it was additional income, the gross allowance totalling $21,311.48 per annum was to be included in the employee’s earnings, resulting in the employee’s income being higher than the high-income threshold.

The employee lodged an appeal against this outcome, submitting that the Commissioner fell into error by not taking into account that he was required to use his car for business purposes and accordingly erred by not apportioning the car allowance according to the business and personal travel use of the vehicle. The employee submitted that if this was done, his earnings would be under the high-income threshold.

The employee also relied upon the Full Bench Decision in Sam Technology Engineers Pty Ltd v Bernadou [2018] FWCFB 1767 (Sam Technology) to argue that his car allowance should be considered a reimbursement and therefore should not be included in his earnings.

Sam Technology set out a comprehensive test for how a car allowance should be treated for the purpose of calculating an employee’s earnings.

Appeal Decision
While Sam Technology was decided after the first instance decision, the Full Bench held that the Commissioner still fell into error and should have had regard to the Australian Industrial Relations Commission Full Bench decision in Kunbarllanjnja Community Government Council v Fewings Print Q0675 (AIRCFB, Ross VP, Watson SDP, Bacon C, 7 May 1998) (Fewings).

Fewings set out that the method for calculating the value of a car allowance portion of total remuneration, which involves determining the percentage of the distance travelled for private purposes. The Full Bench noted that Sam Technology refined the approached set out in Fewings and that both involved examining the business and private use of the vehicle.

In the view of the Full Bench, the Commissioner fell into error by failing to have regard to the method in Fewings when finding that total value of the car allowance was “earnings”.

The Full Bench upheld the appeal, quashed the Commissioner’s decision and remitted it to another Commissioner to rehear the high-income threshold jurisdictional objection.

What can your business learn from this decision?
The high-income threshold is adjusted on 1 July each year and from 1 July 2018, the high-income threshold will increase to $145,400.  Where an employee earns above the high-income threshold, an employer may have a valid jurisdictional objection to a claim of unfair dismissal.

If an employee is paid a car allowance, the Commission will consider what percentage of that allowance is used for private purposes (if any) and apportion this for the purpose of calculating an employee’s earnings in relation to the high-income threshold.

Workers Compensation

"Complete medical record necessary for full picture of injury"

ZFCC and Comcare (Compensation) [2018] AATA 1358

Executive Summary
A worker’s objection to an insurer gaining access to her complete medical records was dismissed by the Administrative Appeals Tribunal (the Tribunal).

The worker claimed that she suffered an injury to her shoulder. Her claim for workers compensation was declined by Comcare and the worker sought a merit review of that decision by the Tribunal.

As part of the merit review proceedings, Comcare served a summons for the production of the worker’s medical records on the medical practice where the worker received treatment.

The worker objected to Comcare having access to all the records produced by the medical practice on the basis that they were not relevant to her alleged work-related right shoulder injury. The worker sought orders that any medical records relating to other treatments she received, such as cancer treatment and pap smears, be redacted from the documents provided to Comcare.

The Tribunal considered that there were some circumstances in which a person’s right to privacy (such as the privacy of personal medical records) was explicitly or impliedly surrendered and this included when a person sought compensation for a work-related illness or disability. The Tribunal explained that in these circumstances, it is presumed that the person is prepared to release their medical record so that a decision can be made whether there is a work-related injury and in practice, this means that the person makes their full medical record available to the decision-maker, and where applicable, the courts or tribunals.

The Tribunal noted that the test for whether access should be granted to documents produced was whether there was a possibility that the documents could assist in the resolution of issues in the proceedings.

The Tribunal held that it could not be concluded that the records the worker sought to be redacted were completely irrelevant and that a full picture of the worker’s medical history could identify other factors relevant to the worker’s injury. Access to the medical records would assist in the merit review of the decision regarding the worker’s alleged injury.

The worker’s objection to Comcare inspecting her complete medical records was dismissed and Comcare was allowed full access to the medical records produced.

What can your business learn from this decision?
In workers compensation proceedings, workers often seek to deny or refuse complete access to medical records on the basis that they also provide details of other non-work related medical conditions or treatment. As this decision recognised, laypersons do not have the qualifications to discern whether clinical notes are irrelevant. Clinical notes can assist a decision-maker in by providing a full picture about the persons health so that a well-reasoned, fair and evidence based decision can be made.

Need a laugh...

I came across two talking stones while I was out hiking. One was big, bit shy the other was a little boulder.

Q:   What sound do porcupines make when they kiss?
A:   Ouch.


Should you require any further information or assistance, please contact our Managing Director Athena Koelmeyer on (02) 9256 7500 or via email on

Information provided in this update is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this update, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.


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